At present, tax authorities, such as the Internal Revenue Service (IRS) provide paper vouchers to tax payers for estimating taxes. The tax payers or their accountants may manually maintain the payment stream to the taxing authorities. Internal Revenue Bulletin #IR-2006-28 dated Feb. 14, 2006 indicates that third-party involvement in reporting or withholding tax payments increases the compliance of tax payment practices. For example, taxes reported under Schedule C, subject to relatively less typical 3rd party-reporting or withholding, has a net misreporting of 57% of wage information, while taxes reported under W-2, subject to typical 3rd party-reporting or withholding has a net misreporting of 1% of wage information. Information misreported under Schedule C contributes to a $68 billion dollar annual payment deficit to the IRS.
A need exists for a means for automatically providing services that minimize noncompliant payments to the taxing authority by Schedule C taxpayers, which may result in costly interest and penalty charges.